HB623 Summary

• Active duty Alabama residents stationed outside the state may deduct military pay and allowances from their Alabama individual income tax returns for service in the U.S. Marine Corps, Navy, Air Force, Army, Coast Guard, or Alabama National Guard.

• The deduction applies only to military pay and allowances not otherwise allowable as a deduction or exclusion from Alabama adjusted gross income.

• Taxpayers cannot claim the deduction for military pay and allowances received while stationed in Alabama.

• Taxpayers must annually certify their residence status on forms provided by the Department of Revenue to claim the deduction.

• The Department of Revenue shall promulgate enforcement rules for the deduction, effective for taxable years beginning after December 31, 2019.